Retirements and Company Bankrupcies

[Sourdough]

I started this on another thread, then decided it needed to be an entirely new one since it did not match the other one well.  Then I forgot and posted it anyway in the wrong place.  So I copied it and started a new one anyway.  Here it is.



 Fellows I have been watching what is going on for many years now.  I have seen several airlines in the Air Line industry go belly up.  Seen Chrysler go belly up, then get bailed out.  Seen Studebaker move to Canada, then go belly up.  Now Ford, Chrysler, and GM are experiencing troubles.  The airline, auto, and other manufacturing companies, have one thing in common.  In the years when they are young lean companies, they do great.  Profit margins are good, paying investors good dividends.  Remember back in the 50s and 60s air lines fed you well on all trips, even the short ones.  But then as their work force aged and people started retiring, they started cutting back on some of the niceties, As more and more people continued to retire, more cut backs.  Back in the early days, life expectancy was not all that great after retirement either, five years on average, so the companies did not have to pay retirements for long periods of time.

Now things have changed, the total number of people retiring in the last few years has been much greater than in years past.  I don't think the companies have been planning for that.  And the life expectancy has greatly increased.  Many people are retiring early from one company and then going to another and starting over with an entirely new retirement program.  Where they retire with two complete retirements at the ages ranging from 55 to 65.

Since these companies have not planned for this they are caught in a position where they are going into the Red every month now having to pay those large retirements, and benefits packages.  That is why so many manufacturing companies have already declared bankruptcy and turned their retirement packages over to the Federal Government.

My personal opinion is that there is much more to come.  Especially as the population ages.   

[buffermop]

Lets not forget a lot of these employees had their own retirement plans as a 401 k and stock options, just to see the greedy wall st. CEO's take them for a one way ride to oblivion.

[ms]

Tell me how GM has money problems . They just open a three hundred million dollar plant in Russia. You won't hear about that on the new I think there cooking the books.




 

SEE ALSO: ALL GM ARTICLES
ST. PETERSBURG, RUS. November 7, 2008: General Motors (GM) opened today a $300 million, flexible assembly plant in St. Petersburg, Russia, in presence of President Dmitry Medvedev. The plant will add 70,000 units of capacity to more than 100,000 already available to GM at joint venture and partner facilities in the country. It will build the Opel Antara and Chevrolet Captiva SUVs and, as of late 2009, the all-new Chevrolet Cruze compact sedan. The plant features a flexible, modern design that can accommodate a variety of different models.

“Today’s plant opening underlines GM’s strong commitment to Russia,” said GME President Carl-Peter Forster at today’s opening ceremony. “This new plant will cement our position as the number one non-domestic manufacturer in Russia, a high-volume growth market with outstanding potential.” The new GM plant in Shushary on the outskirts of St. Petersburg is the third manufacturing site to build GM vehicles in Russia. In Togliatti, the GM Avtovaz joint venture plant is manufacturing the Chevrolet Niva SUV, and in Kaliningrad GM’s partner, Avtotor, is assembling various Chevrolet, Cadillac and Hummer models for the Russian market.

“GM’s investment in this modern, flexible car plant is an investment in the future,” said Valentina Matvienko, Governor of the St. Petersburg region. “We are proud to be the home of the first General Motors plant to open in the company’s second century.”

GM sales boom in Russia
GM nearly doubled industry growth in Russia from January-September 2008 with sales up 44 percent to 256,765 cars and SUVs. GM reached a market share of 11 percent and was the leading international vehicle manufacturer in Europe’s second biggest market.

Chevrolet sales in Russia grew by 33.5 percent or 44,145 units in the first nine months of this year to 175,798. Opel is the fastest growing brand in the Russian vehicle market with sales rocketing to 78,051 in the January-September period, which corresponds to a growth rate of 73.3 percent.

Top quality through standardised manufacturing methods
“Our St. Petersburg plant will work to the same high standards that have recently resulted in major quality awards for our cars,” said Carl-Peter Forster. GM’s new employees in St. Petersburg have undergone intensive training in the company’s global manufacturing system which focuses on top quality in all processes, continuous improvement and involvement of the workforce

[victorcharlie]

I tend to agree, GM is still the seventh largest company in the US.

IMO, they will screw the employees out of their retirement while being allowed to stay in business.  Some of the airlines did the same thing.....employees got pennies on the dollar.

[buffermop]

Was it GM that had their slogan "An American Revolution"?  That info is enough to start one!!!

[torpedoman]

 So sourdough is your suggestion that the retirees just die so the company can survive??  G.M.'s retirement is better funded than your social security and one of the reasons that the government is pushing for them to file bankruptcy, If they do this the government gets to grab the retirement and medical money right off the top and then give the retirees next to nothing. The government of japan covers all their workers medical expenses same with s. korea and india, Wonder why it cost G.M. more to make a car than honda?

[Sourdough]

torpedoman:  What I am saying is that now they have to pay out all this retirement, it's hurting them financially.  I don't know but I would think they will be looking for a way of getting out from under the retirement packages.  Bankruptcy will I am sure be an option.  Then they will be able to turn the retirement fund over to the government and wash their hands of it.  That will screw the retirees.

Also I am not hinting anyone should die so the company can clear their books, I don't think like that.  I do think that the company did not make any plans for the fact that people are living longer now than they did 20 years ago.  Therefore they are caught having to pay out more than they planned.  Another reason to pawn the retirement program off on the tax payer.

[magooch]

These concerns are exactly why everyone should have their own retirement fund and should not have to rely on a company, or government fund.  People should be paid all their earnings when they earn it and not wait to receive it if they live long enough.

Yeah, I know that an awful lot of people would not save for their retirement, but if an iron tight tax deduction were formulated along the lines of IRAs, or 401 Ks, it would be better than hoping that your companies fund doesn't go broke.

I am so happy that I invested heavily into my companies 401K and IRAs.  My companies pension plan still makes more than it pays out in benefits, but if the stock market doesn't pull out of the ditch pretty soon, I don't know how long that will continue.  Anyway, my self managed retirement is as safe as any there is, but even so I can't help wondering if there is really anything that is 100 per cent.

[ms]

The goverment is trying right now to take over 401k and ira they make me sick .

[ms]

Didn't GM also open plants in China and Brazil, too?

As for GM's retirement programs aren't they co-owned/co-administered by the Unions and funded by union contribution and company contributions..? So, these funds are performance based. I think there is a lot of smoke and mirrors about these retirement programs.  What if the USA government decided to reneg on it's retirement and benefit programs..?

..TM7

All the new workers that come into the big 3 now gets 14 dollars base pay and 401k.